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Stalemate ends: Louisiana House backs sales tax for budget

Stalemate ends: Louisiana House backs sales tax for budget

BATON ROUGE, La. (AP) — Lawmakers in the Louisiana House on Monday voted for about $400 million in taxes for next year's budget, breaking through a logjam on taxes that cratered a special, budget-balancing session earlier this year.

On a second try, the House voted 76-26 for a sales tax proposal sponsored by House GOP leader Lance Harris that is the centerpiece of efforts to avoid deep cuts to health, education and public safety programs in the upcoming year. It needed 70 votes to pass, two-thirds support from the chamber.

But even as they made progress on reaching a compromise on taxes, a new rift emerged over how to craft a spending plan to finance state government when the new budget year begins July 1, raising questions about whether another special session will be needed to complete the state's financial work.

"It's a compromise, and that's what we're looking for," Harris, of Alexandria, told his colleagues on a rare Memorial Day debate in the chamber.

There was no debate on the bill. Harris introduced it, and the vote was swift.

Also winning House passage was a proposal by Rep. Katrina Jackson, a Monroe Democrat, which renews an expiring limitation on an individual income tax break that Louisiana allows for taxes paid to other states. Continuing to scale back the tax break would raise nearly $34 million a year through its 2023 expiration date.

Harris' bill would raise more than $360 million in the upcoming budget year and $400 million annually thereafter — until it expires in another five years.

The measures move next to the Senate for consideration.

About $1.4 billion in temporary taxes passed by lawmakers in 2015 and 2016 to plug budget holes disappear July 1. With other tax offsets, Louisiana is estimated to get $648 million less in general tax dollars next year.

The taxes backed by the House on Monday fall short of raising the $648 million Democratic Gov. John Bel Edwards is seeking. But the votes marked a notable shift from an earlier special session Edwards called in February to pass taxes that collapsed in gridlock in the House, with no money raised to close the budget shortfall.

Harris' bill would renew one-third of an expiring 1 percent sales tax, eliminate some sales tax breaks and continue sales tax charges on business utilities. The changes would again be temporary, lasting until 2023.

Louisiana's state sales tax rate currently is 5 percent, dropping to 4 percent on July 1. Harris' bill would move the rate to 4.33 percent on July 1. Edwards wants a 4.5 percent rate.

But even as taxes advanced, the Edwards administration and Democratic lawmakers Monday raised concerns about inaction on a budget bill to spend the money and keep agencies operating in five weeks.

Edwards vetoed a $28.5 billion budget that he said cut too deeply, expecting lawmakers to write a larger spending plan during the special session. But the veto provoked anger from Republicans.

House Appropriations Chairman Cameron Henry, a Republican, insists the budget process, with extensive hearings, must now start from scratch. His committee opened the hearings Tuesday with only a week remaining before the session must end.

Henry instead sought to override Edwards' veto of the budget bill.

"If you want speed, this gives you the greatest chance," he said.

The override effort failed in a 52-48 vote, short of the 70 votes needed. Henry didn't even get full support from GOP lawmakers.

Democrats said Henry's approach could force lawmakers into a third special session this year.

"I understand that people have frustrations about the veto ... But is that enough to crash this special session?" asked New Orleans Rep. Walt Leger, the top-ranking Democrat in the House.